29 May 2014

Inequality stifles growth, pursuing equality does not hinder it

With the 2014 dud budget - or "dudget" - we finally see the deluge of boganomics lap at the pinnacle of Australian economic policy.

We needed only the mention of austerity for our fragile economy to falter... unforeseen consequences - for no one except Abbott and his band of fundamentalists.

What Tony 'Saruman' Abbott does not understand is what even the dry IMF does:

A widely-publicised internal paper by three of [the IMF's] senior economists released earlier this year questions the conventional market view that inequality has little or no negative impacts on growth. While it cautions that the relationship between growth and inequality is complex, the study concludes on the basis of its multi-decade, cross-country statistical analysis, lower inequality "is robustly correlated with faster, more durable growth".
Source: The AgeTrickle-down theory all washed up now, Mark Triffitt

And they're not the only dries coming out of the cold:

The IMF study, for example, prompted the Financial Times' Martin Wolf, one of the world's foremost super-dry economic commentators, to write, "not only does inequality damage growth but efforts to remedy it are on the whole, not harmful".
Source: The Age again

But you didn't need me to tell you that. Highly redistributive countries such as Switzerland or... Australia are also the rich countries. And countries with entrenched plutocracies and impoverished millions such as the Central African Republic are poor. 

This would seem to make sense even without dangerous experimenting on oneself: the plutocracy entrenches itself and uses the state to strangle any competition.

As we say in football: "Look at the scoreboard!"


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